FCPT

FCPT is a conservatively run, single-tenant net-lease REIT spun out of Darden in 2015. The filing paints a high-quality, defensive portfolio: 1,303 free-standing restaurant/retail properties across 48 states, 99.6% occupancy, a 6.9-year weighted average remaining lease term, 1.5% contractual rent escalators and 53% investment-grade tenancy. Tenants bear taxes, insurance and maintenance under net leases, so the cash flows are durable. The balance sheet is sound for a REIT — liabilities/equity of just 0.79x, with $1.19B of debt fixed-rate and hedged, so management states a 1-point rate move would not materially affect results. Operating cash flow of $192M (+33.4%) comfortably funds the $144M dividend, and FCPT deployed $325.5M into 105 new properties in 2025, the external-growth engine that diversifies it away from Darden.

The catch is per-share value creation. Net income grew a healthy 11.8% to $112M, but shares outstanding rose 9.8% to fund acquisitions, so diluted EPS advanced only 1.9% to $1.09. ROE is a modest 6.9%, and the multi-year history shows steadily but slowly compounding earnings (net income $85.6M → $112M from FY2021–FY2025). This is an income vehicle, not a grower: at $25.36 the dividend (≈$1.31/share on $144M paid over 110M shares) yields roughly 5.2%, which is the core of the return case.